By Nick Reisman
Supporters of a measure that would create public banks in New York pointed to the recent failures of financial institutions like Silicon Valley Bank and Signature Bank as an impetus for the passage of a measure that would enable public options for deposits.
In a letter to state Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie, a coalition of advocacy organizations backing the measure urged them to pass the law in the wake of the failures.
“The New York Public Banking Act creates a safe and appropriate regulatory framework for public banks – financial institutions created by local governments and chartered to serve the public interest,” the groups wrote. “Passing the bill this session will demonstrate the legislature’s commitment to addressing inequities in our financial system and economy while helping to promote stability in New York’s banking sector.”
The public banking measure has stalled for the last several years in the state Legislature.
The bill is meant to create a public banking plan with the goal of support low-income communities. The publicly held banks would have written into their charters goals of promoting racial justice and community-backed development.
The failure of Silicon Valley Bank in California and Signature Bank in New York have created concerns over broader instability in the banking system nationally.
The push for the public bank measure comes as lawmakers and Gov. Kathy Hochul are negotiating a $227 billion spending plan this month, due April 1.